Checkbook Control IRA
Our Checkbook Control IRA lends itself well to real estate investors with multiple operating properties or projects with frequent money movement, such as flipping. While this type of IRA works well for real estate investments, it does not mean it only works for real estate: investors may still invest in all alternative investments — precious metals, crypto, etc. Investors may choose to have a stand-alone IRA with checkbook control, or it may be a component of a larger IRA. We have multiple options for how to structure a self-directed IRA (SDIRA) with checkbook control.
Options for Checkbook Control
To enable an IRA to access a checking account, a special purpose entity must be established — the investor will then direct IRA funds to be invested in this special purpose entity. This entity, under the investors control, is then free to make investments in any number of alternative assets in a tax-advantaged manner, as the entity is disregarded for tax purposes, flowing back to its owner, the custodian on behalf of the IRA.
IRA Trust
An SDIRA can leverage a trust as an investment vehicle to gain greater control over alternative investments like real estate, private equity, or precious metals. By establishing a trust owned by the IRA, investors can manage transactions directly through a dedicated bank account, bypassing the need for custodian approval on each investment. Using a trust may be advantageous in states with high yearly fees and reporting requirements on LLCs.
IRA LLC
An SDIRA can also utilize an LLC as the investment vehicle for alternative investments. By creating an IRA-owned LLC, transactions are managed directly through the LLC’s bank account, enabling easy payment of vendors or collection of rents. The checkbook control structure simplifies the investment process, making it a popular choice for investors seeking efficiency and flexibility.